Enclosed are the ramblings of one of the last of the baby-boomers. My thoughts are of Railroading, Automobiles, Design, Politics, Culture, Religion,and Parenthood.

Mile Post 370

Mile Post 370

Saturday, February 20, 2016

Transparency Shouldn't Be Exclusive to Corporations: A Plan To Stop the
Government from Cooking The Books

I
believe that I have a pretty good understanding of Economics. Now,
before you hold up a Wooden Cross, Try to Douse Me with Holy Water or
Shoot Me with a Silver Bullet, realize that if you deal with money,
barter or trade your time and skills for money, you've also involved
yourself in Economics.

One of the Economic Indicators
(of how well we are doing as a country) is employment.
Specifically, it's a trailing indicator, so, in economic terms,
things are already getting better before more jobs happen or already
getting worse before jobs start getting cut. "Unemployment
Figures" are important to the public, because we usually know
when a friend or acquaintance somewhere within our circle has lost a
job. It is personal, understandable and something to which
we can relate.

Merging Economics with Politics
is easy, because they can't be separated. Most things that are
demanded by a populist constituency and given by a
politician, require additional costs.

When
additional regulations are put in place to alter behavior or to
protect the public from a manufacturer, it costs consumers in
monetary value, convenience or time.

When
government continually over spends and runs a large national debt,
where borrowing costs must be raised to pay the debt off, it costs
businesses and citizens more in taxes.

When a country's Central
Bank chooses to increase the amount of money in circulation, without
increasing the commodity on which money is based upon, money has
less value and prices go up to reflect that loss of value.

Because of the dishonest
decisions of Executives in reporting the financial results of
energy giant, Enron, many investors and employees were hurt and
lost investments and jobs. Because of the high visibility of
the bankruptcy and financial dissolution of Enron, laws were
eventually passed that require a company's executives to be
responsible for its economic claims. So Congress passed and
President Clinton signed the Sarbanes-Oxley regulations into law.
And while this costs a company time and its customers money, it has
been the law of the land for nearly 20 years.

About 200 years ago, Alexis de
Tocqueville, upon visiting America, wrote, "Liberty
cannot be established without morality, nor morality without faith."
While I could easily
turn this into an ethical issue, making a case for that basic
morality has disappeared because Christianity, as a value system, has
been forced out of society, there is another more important point to
be made: Equality under the Law.

Our government issues debt
(Bonds) to cover the gap between what it takes in as income tax and
what it actually spends (deficit spending). Because of the
run-away spending that has happened under President Barack Obama, our
bonds were recently down graded, due to the risk associated with the
amount of debt we are carrying as compared to our Gross Domestic
Product. Because of the downgrade, the government must now pay
a higher rate of return on these bonds. This is a death spiral
that will continue until the Bonds are of Junk Status, paying high
returns, but not a safe investment, due to the risk of non-payment,
requiring large amounts of Capital Returns to attract investors.
Ultimately, it's the tax payer that will have to deal with all of
this.

Because this situation, is
similar to the Enron debacle, wouldn't it make sense
that Sarbanes-Oxley Financial Reporting Laws should apply to the
Federal Government? I am not an expert on Sarbanes-Oxley
Financial Reporting Law requirements (and I would not be surprised if
the government had exempted itself from this law.) However, our
investors and tax payers should have reasonable assurances that
we can and will repay the purchasers of this debt in a timely manner
and at the rate of return to which we've obligated ourselves.

In Article II, Section 3 of
the Constitution states that the President "shall
from time to time give to the Congress Information of the State of
the Union, and recommend to their Consideration such Measures as he
shall judge necessary and expedient;..."
The State of the Union is not a place to announce the latest Social
Program or some other nation building expedition.

The State of the Union
Speech, would be the BEST time for the President (not a White House
Press Secretary) to OWN the economic news, whether good or bad.
This news should include:

REAL
Unemployment Rates (not the manipulated numbers that don't
include people that have dropped out of the job market, having given
up all hope of ever finding employment again. It should
include the whole story, including the percentage of working
aged adults that are participating in the workforce)

The
Debt to Gross Domestic Product Ratio, so we can really understand
what we owe to bond holders.

The Expected Revenue from
Taxes and How We should Deal with any budgetary shortfall

The President's proposed fiscal
Budget should be sent out electronically to Congressional
Representatives, Senators and their Staffs, with copies available to
any citizen that wants to see it, at least 2 weeks before the State
of the Union. It should be in a streamlined form that is
understandable to the general public and limited to no more that 10
pages total of data and graphs, not 1400 pages of minutiae designed
to bore the individual to death.

At that point in time the
president should make his case as to which programs are necessary,
which programs are required by the Constitution and which programs
are superfluous. Then and only then should Congress respond to
the President's budgetary request and the president should have the
bully pulpit to sell his programs.

This system would work well
with the proposed Balanced
Budget Amendmentand
former President, Ronald Reagan's much sought after Line
Item Veto, giving
the President the chance to veto a line item he finds unnecessary or
wasteful, but giving Congress the ultimate authority to override any
Presidential Veto and still control the purse strings.

When any law excludes the
ruling oligarchy, but applies to the rest of us, the American people
think that it's time for a house cleaning. With the carved
out exemptions for Congress in Obamacare, America's citizens are
on a voting rampage against the establishment, supporting outsider
candidates for President in a 2 to 1 ratio over the establishment
candidates.

If we are all equal under the
law, shouldn't LAWS apply to all citizens, including
those who we elected and are paying to govern us? Sarbanes-Oxley
is the law of the land. If Sarbanes-Oxley Financial Requirement Laws are a requirement for America's Businesses, shouldn't they be a requirement for the Federal Government?

It is past time that our elected
leaders take responsibility for the decisions that they make. The Government needs to follow any law it
created.

No comments:

Post a Comment

About Me

I'm one of the last of the Baby Boomers, married to another one of them. We live in middle class suburbia, in what used to be a small town, but is now a bedroom community of a City large enough to have a professional sports team.
We've raised 2 kids the old fashioned way, with my wife staying at home on a middle class income, while paying off debt. She home schooled both of them thanks to liberal home school laws , (however, we had to have them End of Grade Tested Each Year). We're politically conservative, Reformed Church Followers and Disciples of Christ. trying to live our lives with purpose.
I'm just trying to keep my head down and not bother anyone, but be available when someone needs me.